Washington state town mulls disincorporation, citing finances

July 12, 2012|Reuters

* Town's legal bills mount over lawsuits

* Leaders to finalize plan Tuesday

By Laura L. Myers

SEATTLE, July 12 (Reuters) - A Washington state town foundeda century ago as a gold prospectors' camp in the foothills ofthe Cascades Mountains may ask residents to considerdisincorporation to avoid having to file for bankruptcy, itsmayor said on Thursday.

Mayor Joe Beavers said the town of Gold Bar would otherwisespend roughly a sixth of its $550,000 general fund, or about$90,000, out of a total $1.4 million annual budget, to defenditself this year against a slew of mostly recall and publicrecords lawsuits.

"We're going broke winning lawsuits," said Beavers, 69, aretired engineer who moved from Texas five years ago and earns$3,600 a year as mayor.

Of 15 lawsuits filed since 2009 - all but three filed by thesame person - several tried to recall Beavers as mayor orattempted to unseat two other city council members while most ofthe remainder were public records suits.

"We've already spent $65,000 this year, and $90,000 isoptimistic," Beavers told Reuters, adding that the town had topay a private law firm to defend the suits because it does nothave a city attorney. "We will have insufficient money to payour obligations."

Gold Bar, which has 2,100 residents, was founded inSeptember 1910, two decades after a miner discovered gold ingravel along the Skykomish River, today known for white waterrafting 50 miles northeast of Seattle.

Town leaders are slated to finalize Tuesday whetherresidents will vote in November to disassemble Gold Bar'sgovernment or pay higher taxes in an "excess levy," at a rateequal to $200 for a home assessed at $200,000. That would raiseabout $113,000.

If voters reject both options, the town would file forChapter 9 bankruptcy, Beavers said. He declined to say whichoption he viewed as the most likely outcome.

Gold Bar is the state's only town in the last four decadesthat could allow voters to consider disincorporation, CandiceBock, a legislative and policy advocate for the Association ofWashington Cities, told Reuters.

A petition signed by about 150 Gold Bar citizens blamesdisgruntled residents using the state's Public Records Act "toflood our city with multiple large requests that accomplishnothing."

Attorney Anne Block, named as plaintiff in a number oflawsuits filed against Gold Bar, did not immediately returncalls by Reuters. Block's Seattle attorney, Bill Crittenden,said he filed one public records suit on behalf of Block inFebruary 2009 over why a city maintenance worker was fired.

Before Beavers came into office, Gold Bar "had a mayor whowas running the city on a Blackberry and using a private AOLaccount for city business. In 2008, that should not have beendone," Crittenden told Reuters.

UNUSUAL MOVE

The city's call for disincorporation was "very unusual",said Pat Mason, senior legal consultant for Municipal Researchand Services Center in Seattle. Only five other Washingtoncities have dissolved their incorporations, Mason told Reuters.

Westlake, with a population of 440, disincorporated in 1972,and Elberton, population 62, did so in 1966, as did three othertowns during the 1920s and 1930s, Mason said.

Two other small Washington towns also face a deep budgetcrisis. Mesa, population 500 and located 200 miles southeast ofSeattle, faces a $230,000 judgment over public records thatremains in litigation, Clerk-Treasurer Terri Standridge toldReuters on Thursday.

Normandy Park, a Seattle suburb with a population of 6,350,will ask citizens to raise $331,000 by lifting a levy lid inNovember.